1. The Field of the Invention
The present invention relates to negotiating and binding reinsurance of insurance risks. More particularly, the present invention relates to systems, methods, and computer program products for facilitating the negotiation of reinsurance for insurance risks.
2. Background and Related Art
The process of transferring a risk from one insurance company to another is referred to as reinsurance. An insurance underwriter or another representative of an insurance company who holds a risk is called a cedent. An intermediary for an insurance company who acquires reinsurance of risks for insurance companies is called a broker. In a reinsurance negotiation a cedent or broker provides information to a reinsurance company, underwriter employed by a reinsurance company, or a broker representing the reinsurance company. The reinsurance company or underwriter is called an assumer. The assumer will typically review the information and may discuss it with the cedent or broker to further assess the magnitude of the risk.
The parties will negotiate terms under which the assumer will be prepared to assume all or a portion of the risk in exchange for a premium. During the reinsurance negotiation, the parties will use analysis of the risk and relevant experience in the field to determine the terms of the reinsurance. The exchange of negotiation information can be facilitated by many methods including email, fax transmission, courier package, postal service, by hand, telephone, or video-conference. Various forms might be used to collect the information in a structured format and to indicate typical questions used to facilitate analysis of the potential risk. The information can be presented in many forms including diagrams, presentations, financial information, contracts, summaries, descriptions, photographs, and/or conversations. Negotiations can be conducted during an abbreviated or extended time period and can involve multiple parties in close or distant geographic proximity to one another.
Due to differences with which different cedents, brokers, and assumers organize and present reinsurance and risk information, there is a lack of conformity in the way negotiations are handled. This leads to negotiation information that is unstructured and difficult to efficiently access and review. Because those involved in the negotiation and placement of reinsurance risks use substantially varied business practices, the lack of uniformity of risk information, reinsurance information, and negotiation information can make accessing and managing the information difficult.
There is an ever present need for reinsurance as a means of spreading risk across insurance and reinsurance companies and for allowing reinsurance products to be made available in a form that cedents and assumers find useful. Accordingly there is a need for facilitating the sharing of information between a cedent, a broker, and an assumer; negotiating terms and conditions for the reinsurance; managing of information; and binding and subsequently endorsing policies for reinsurance.